Monetary policy implementation in Vietnam during the COVID-19 pandemic

Abstract

Since joining the WTO, the openness of Vietnam's economy has continuously increased, from 64.3% of GDP in 2008 to over 200% of GDP today. As a result, Vietnam's economic openness becomes vulnerable and sensitive to external shocks. The COVID-19 pandemic is considered to have very strong, even serious impacts on the Vietnamese economy, in which, three main impacts include (i) negative impact on investment and trade, especially international trade; (ii) disruption of important production value chains; (iii) decline in domestic tourism and service consumption. The impacts on all economic activities of the COVID-19 pandemic will certainly have significant impacts on the business activities of Vietnam's banking industry, which is considered the lifeblood of the economy. In order to minimize the negative impacts of the COVID-19 pandemic on the economy in general and the banking system in particular, the State Bank of Vietnam has implemented a comprehensive package of policy measures. This research focuses on analyzing policy measures which have been implemented by the SBV during 2020-2021. Therefore, the research proposes policy recommendations for the next stage to recover the economy.